Slovenia, Croatia near solution for row blocking Croatia's EU bid

OTOCEC, Slovenia Wed Feb 6, 2013 3:48pm EST

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OTOCEC, Slovenia (Reuters) - Slovenia and Croatia stepped closer to solving a 20-year old bank dispute on Wednesday and will now race to hammer it out in the coming weeks so that Croatia can join the European Union as planned on July 1.

"After today's meeting I think we're on the right track... We've cleared the expert aspects and are now looking for political solutions," Slovenia's Foreign Minister Karl Erjavec told reporters after a six-hour meeting with his Croatian counterpart, Vesna Pusic.

Zagreb concluded EU entry talks in June 2011 but cannot join before its accession treaty is ratified by all 27 members. Slovenia, beset by a financial and government crisis, is the only EU member that has yet to start the ratification.

Pusic said a fresh meeting was scheduled in the Croatian capital on Feb 19, only three days before Erjavec and his party are due to quit the Slovenian government, which has already lost majority in parliament.

So far Slovenia has shelved Croatia's ratification because of a dispute over Ljubljanska Banka, a Slovenian lender that closed down in 1991, when the two countries declared independence from Yugoslavia, without reimbursing its Croatian depositors.

Unless a compromise is reached before Erjavec resigns, the process is likely to be derailed. The Ljubljana government, which must appoint his successor, is at a risk of collapsing after two junior partners walked out this month and early elections are possible.

Both ministers said they had personally agreed on one of the proposed solutions but now needed to get their governments' approval.

(Reporting by Suzana Sabljic, writing by Zoran Radosavljevic; editing by Ron Askew)

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